In Depth

A federal judge has ordered an ex-mayor and top allies to pay more than $108 million in damages on a civil racketeering case,
but in doing so he's rejected the Indiana Attorney General's most novel and far-reaching legal arguments centered
on public corruption in East Chicago.

In issuing his 53-page decision late Thursday afternoon, U.S. Senior Judge James Moody criticized the state's top
attorney for failing to flush out legal arguments or provide enough rationale, trying to basically bypass due process in targeting
non-parties, and going beyond the scope of federal and state Racketeer Influenced Corrupt Organizations (RICO) statutes.

The ruling comes in State of Indiana and City of East Chicago v. Robert A. Pastrick, et al, No. 3:04-CV-506, a 6-year-old
case that AG Greg Zoeller inherited when he took office and involves the decade-old "sidewalks-for-votes" scandal
that helped bring down a Lake County political titan. The civil racketeering case went after former mayor Robert Pastrick,
and his top aides James Fife III and missing councilman Frank Kollintzas, for misusing $24 million in public money to pave
sidewalks and driveways to gain votes in the 1999 Democratic primary.

In assessing the damages, Judge Moody counted the $27.3 million originally totaled from the sidewalks-for-votes scheme -
$24 million plus legal fees and other financial costs - and added on $8.7 million in prejudgment interest, which is four years
worth at an 8 percent interest rate. With treble damages that he determined were allowed through his interpretation of state
and federal law, the total came to $108,007,584.33.

But in the legal points the AG made beyond the misused public money, Judge Moody rejected those proposed remedies and essentially
told the state agency it was overstepping its authority. Most of the second-half of his order focuses on this, pointing out
in multiple stops that the AG has failed to offer authority or missed the point of caselaw.

Judge Moody determined that the city couldn't recover salary or compensation from Pastrick or the aides because that
isn't allowed by the civil RICO statute, that plaintiffs couldn't recover money paid to Fife's consulting firms,
and that the court didn't have the authority to issue an injunction banning the defendants from holding any public office
anywhere in the U.S. He also admonished the AG for trying to open up the finances of for-profit and non-profit organizations
- non-parties - that received casino money and provided some of that for local development projects. The AG had offered possible
remedies the court might impose, such as civil forfeiture, a state-ordered "forensic audit" of non-party organizations,
and having the court serve as a receiver if any money might be recouped from them.

"The obvious and most critical problem with plaintiffs' request is that it cannot be reconciled with principles
of due process," Judge Moody wrote, relating to one of the AG's proposed remedies - a forensic audit. "These
core, intertwined due process issues prevent the court from ordering the remedy plaintiffs seek in this case."

Zoeller wasn't available for comment by Indiana Lawyer deadline about the legal aspects of the judge's decision,
but his office released a statement describing this as a victory for the state.

"I am enormously pleased that the federal judge awarded triple damages against former Mayor Pastrick and the other remaining
defendants as a symbol of how brazen and shameless the public corruption was in the municipal government of East Chicago during
the Pastrick regime," Zoeller said in the statement.

The statement says the AG will now dedicate all necessary efforts to collect that judgment, which attorneys involved say
is largely uncollectable because of the amount and the defendants' little money available to put toward it. The AG's
office now can file its brief outlining attorney fees and costs associated with the case.

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